CBN Releases Banknote Fitness Guidelines

One of
the core mandates of the Central Bank of Nigeria (CBN) as enunciated in section
2 of the CBN Act, 2007, is the issuance and management of the legal tender
currency in Nigeria. The Currency Operations Department (COD) of the CBN is
responsible for the discharge of this mandate by ensuring that the volume of
banknotes and coins in circulation is sufficient, of good quality and generally
acceptable by the public. To achieve this, the Bank manages the currency notes
throughout their life cycle. The notes can easily be checked for their
genuineness during the period of circulation. The banknotes are also sorted
into fit and unfit notes. The fit notes are recirculated while the unfit
banknotes are withdrawn, disposed and replaced by new banknotes.

1.2 Definitions

Note Quality Standard

The objective of a banknote fitness standard is to
address the following:

Ensuring
that banknotes meet the expectation of the public in terms of cleanliness
and appearance;

Ensuring
that basic security features on the banknote remain visible and are easily
recognized by the public to deter counterfeiting; and

Facilitating automated dispensing, counting and sorting
of banknotes.

Fit Banknote

A
banknote that is suitable for continued circulation and is sufficiently clean
to allow its authenticity and value to be readily ascertained.

Unfit Banknote

A
banknote that is unsuitable for further circulation because of its physical
condition, which may be soiled, dirty, limp, worn out, defaced or has a hole
that is larger than 10 mm. Unfit notes should be returned to DMBs or a branch
of the CBN anywhere in Nigeria for exchange.

1.3 Guidelines on Quality
Standard for the Nigerian Banknotes

These
guidelines provide the general public with clear, acceptable criteria and
standards for determining the quality of banknotes in circulation. Fitness
standards are developed for all denominations of the banknote. These standards
establish the desired fitness criteria and parameters for the banknotes which
provide a benchmark and reference for evaluating banknotes in circulation. The
fitness criteria include: